No Backslide in Retirement Preparedness in 2012

Sixty-eight percent of employees
reported having a handle on cash flow—compared to 72% in 2011 and 64% in
2010—and a greater percentage of employees reported having borrowed funds or
taken a hardship withdrawal from their retirement plans in 2012—32% versus 25%
in 2011.However, 91% reported participating in their retirement plans, and 83%
are saving at least up to the match.

Financial Finesse believes the
stability of retirement preparedness measures is largely due to increased focus
on retirement education by plan sponsors, coupled with strong market
performance.

Seventeen percent of employees reported they know they are
on target to replace at least 80% of their income in retirement. One-third are
confident their investments are allocated properly.

(Cont’d…)

The percentage of questions received
by Financial Finesse’s team of planners related to taxes doubled in 2012, but
retirement planning held the top spot at 31%, the same as for 2011.Interest in
cash and debt management fell, as did interest in investing.

Employee financial stress continued
its downward progression, with only 18% of employees indicating “high” or
“overwhelming” levels of stress in 2012, compared to 19% in 2011, 32% in 2010,
and 33% in 2009.Sixty-four percent reported “some financial
stress.”

Both the decline in financial
wellness and the increase in the percentage of employees that reported having
taken a retirement plan loan or hardship withdrawal were most pronounced among
lower-income employees, women, and Generation X.

Financial Finesse’s 2012 Research Year in Review can be
downloaded from here.